RBI imposes monetary penalty on Rajgurunagar Sahakari Bank Limited

Mumbai (Maharashtra) [India], October 17 : The Reserve Bank of India (RBI) said on Monday it has imposed a monetary penalty of Rs 4 lakh on Pune-based The Rajgurunagar Sahakari Bank Limited on non-compliance with directions of the central bank on the interest rate and deposits.
The RBI issued an order in this regard on 14th October 2022. The Rajgurunagar Sahakari Bank Limited has been penalised "for contravention of the directions issued by the Reserve Bank of India (RBI) on Interest Rate on Deposits."
This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI, the central bank said in a statement.
"This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers," the RBI said.
The Inspection Report of the bank based on its financial position as on March 31, 2021, revealed inter-alia that the bank did not pay interest on balance amounts lying in current accounts of deceased individual depositors/sole proprietorship concerns while making payments to the claimants.
Based on the same, a Notice was issued to the bank advising it to show cause as to why penalty should not be imposed for non-compliance with the directions.
After considering the bank's written reply to the show cause notice, RBI came to the conclusion that the aforesaid charges of non-compliance with RBI directions was substantiated and warranted imposition of monetary penalty.